Simple IRA Transfer
Hello, can a SIMPLE IRA that has been open for less than 2 years move in kind to a SIMPLE at the same custodian? Could this be do as a rollover or a trustee to trustee no reportable? Any guidance would be greatly appreciated.
Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2020-03-06 14:59
A direct transfer can be done to any SIMPLE IRA custodian in the first two years, and a 60 day rollover can also be done to another SIMPLE IRA. However, as with any IRA rollover, it is always best to move the funds by non reportable direct transfer.
Permalink Submitted by Kevin O'Hearn on Fri, 2020-03-06 15:37
Thank you Alan. So the best move would be to move this as a non-reportalbe trustee to trustee transaction? My custiodian is advising me that the Simple to Simple move would need to be made as a normal distribution. Have you seen this scenario in the past?
Permalink Submitted by Alan - IRA critic on Fri, 2020-03-06 16:23
No, but the tax code permits it. Did you try to have the new SIMPLE custodian pull the account over by direct transfer for you? I assume this is a 5305 SIMPLE with a DFI, since these accounts typically have high fees and while these custodians must allow a transfer, they often try to make it difficult. If you are well into the second year of the 2 year period, it may be better to wait out the 2 years, then do frequent direct transfers to a TIRA. I don’t know how easy it is to set up a “transfer SIMPLE IRA”, but would certainly be sure it is established before taking any distribution.